Buying Home

sugar-land-market-report

Sugar Land Real Estate Market

Dated June 2020

Sugar Land Real Estate Terminology

Buyer’s Market vs. Seller’s Market

The  Sugar Land real estate market is constantly changing. The way we determine the type of real estate market we’re in (Buyer’s Market vs. Seller’s Market) is based on the amount of Inventory (homes available for sale) currently available. Six months of inventory is usually considered “equilibrium” —neither a Seller’s or Buyer’s Market. A Buyer’s Market is considered to be 7 months or more of inventory. This is where the demand for homes is somewhat less than the supply of homes and when Buyers may have more control over house prices than Sellers. A Seller’s Market is considered to be 5 months or less of inventory.  This is where the demand for homes is somewhat greater than the supply of homes and when Sellers may have more control over house prices than Buyers.

Months of Inventory

Months of Inventory refers to the number of months it would take to sell all of the currently listed homes on the Sugar Land real estate market, with no new homes being added. This may also be called the “Absorption Rate” because it is the rate in which houses are “absorbed” in the current market. Generally speaking, if Inventory is greater than 6 months, then it is a “Buyers Market,” and if Inventory is less than 6 months, then it is a “Sellers Market.”

Months of Inventory =

# Active on the Market

(# Sold in Past 12 mths 12 mths)

 

Cumulative Days On Market

How long it takes to sell homes can be a good indicator for “how’s the market”? The longer it takes to sell homes, on average, the slower the market. So if the cumulative number of Days on Market is increasing, then the market may be slowing down, and if CDOM is decreasing, then the market may be speeding up.

“Days on Market” refers to the days a specific home listing has been on the MLS. If the real estate agent Terminates the listing and then relists it with a new MLS number, then the DOM resets. However, the Cumulative Days On Market should show the total Days on Market for that particular home, regardless of the number of time it is terminated and relisted by one or more real estate agents.

Keep in mind that areas with lower-priced homes will usually sell faster than luxury-priced areas, because the more affordable the home’s price, the larger the number of potential buyers, and the quicker it can sell.

Median Price

Median Price is not the same as the Average Price; it is the middle point for real estate prices. The Median Price is the price in the middle of all the sales prices for a certain time-period, with exactly half of the houses priced for less and half priced for more.

It is generally believed that the Median Price is the best indicator for market activity because it is less affected by abnormally low prices or high prices (which skew the Average Price).

Overall Market Data for Past 6 Months

The following data is for Sold single-family properties in the past 6 months as of June 2020.

ZIP Code

# Active

# Sold

Mths of Inventory

Median CDOM*

Median Sold Sales Price

Highest Sold Price

Lowest
Sold Price

77479

(past 6 mths)

376

494

4.6

71

$379K

$2.25M

$175K

2019

n/a

1078

n/a

61

$364K

$2.3M

$165K

2018

n/a

1205

n/a

65

$380K

$2.7M

$155K

77478

(past 6 mths)

87

100

5.2

83

$321K

$4.9M

$165K

2019

n/a

267

n/a

50

$332K

$1.87M

$160K

2018

n/a

253

n/a

33

$323K

$4.7M

$145K

77459

(past 6 mths)

332

800

2.5

76

$296K

$2.6M

$125K

2019

n/a

1453

n/a

67

$295K

$1.87M

$118K

2018

n/a

1253

n/a

60

$298K

$2.1M

$87K

77498

(past 6 mths)

95

195

2.9

61

$236K

$800K

$120K

2019

n/a

463

n/a

32

$228K

$1.4M

$97K

2018

n/a

489

n/a

24

$220K

$778M

$80K

NOTE: The number of Actives on the market and Current Inventory is only applicable to now…we don’t know the number of Actives in the past.

 

Trends for Sugar Land (77479)

 

77479-prices-10yr

Trends for Sugar Land (77478)

Trends for Sugar Land (77459)

 

Trends for Sugar Land (77498)

 

 

⇒ See Pricing a Home Correctly

 

Get the Full Report!

So I put together my Sugar Land Housing Market Report for you, which covers:

  • List of the fastest selling neighborhoods in the Sugar Land area
  • Market data on the most popular neighborhoods
  • Ten-year trend of average sales prices by ZIP Code
  • List of the most expensive neighborhoods in the Sugar Land area

This is helpful information if you are thinking about buying soon. 

sugar-land-market-report  Get the Report!

Updated as of June 2020
 

 

What to Expect When You Buy a New Construction Home

So you have put a contract on a new home with a builder and you can’t wait to move in. Buying a home is exciting, especially if you are a first-time home buyer, but buying a brand new home that has never been lived in doesn’t mean the house will be perfect and you won’t have any issues. In fact, the first owner of a home generally has to work out the “kinks” of a new home…kind of like breaking in a new car.

>> See Buying New vs. Resale Home and Buying A Newly Built Home – A New Home Buyers Guide

happy young couple and homeOne of the most important things you need to know: Get the home inspected by a licensed house inspector! Again…”new” doesn’t equal “perfect” and you need an expert to find all the things the builder missed (and give the inspection to the builder to fix what needs fixing). In fact, I have seen inspection reports on “brand new” never-lived-in homes that are longer (with more items to fix) than an older resale homes! And if you are building a home “from dirt” then you may want to hire an inspector who will inspect the home in various stages of completion: foundation, framing, wiring and plumbing, and then final.

>> See List of Licensed Home Inspectors

Another thing you need to know: Read the Builder’s Home Warranty! You need to know what the builder will and will not cover in their warranty since every builder is different. Plus, you don’t want to do anything to the home that may negate the warranty. For example, if you improperly plant bushes or trees, or regrade the yard and level it out so that it cannot drain properly, then you may negatively impact the foundation and your “performance” may negate the warranty on the foundation. In fact, you may want to wait a year or so before doing any major landscaping and work out drainage issues first.

>> Read  Buyer’s Guide to Slab-On-Ground Foundations by R. Michael Gray, P.E. and Matthew T. Gray, EIT.

Make sure you keep your home warranty in a safe place with your other important house documents (deed, note, inspections, survey, etc.). You may receive a warranty sticker at Closing or afterwards in the mail. Make sure you put that with you important documents as well! 

Always do a final walk-through before Closing to make sure the house is completed and in good working order. Usually the builder’s Building Supervisor (aka “super” or “superintendent” or “constructions manager”) will walk the home with you. If you see items that need attention, add them to the “punch list” of items they need to fix. And you should never Close on the house until everything is fixed. A builder may promise to fix something after the fact, but I have heard many “horror stories” from people who regretted Closing on a home with unresolved issues because the builder never did fix those issues as promised..once the house was Closed.

Before you move in you may want to know the types of things you may need for your new home:

  • Appliances (refrigerator, washer, dryer)
  • Furniture
  • Window blinds
  • Window treatments (curtains, valences, etc.)
  • Garage door opener
  • Grass sod for back yard
  • Rain gutters 
  • New locks for doors (learn more)
  • Yard tools (mower, weeder, edger, etc.)
  • Garage storage shelves
  • Baby proofing

Once you move into the new home, then what? 

  1. Take care of your foundation! Make sure you read Buyer’s Guide to Slab-On-Ground Foundations so you understand how to take care of your foundation. Consider installing a sprinkler system (call Leopold Sprinkler Systems). 
  2. Plant some trees and bushes in the backyard for future privacy (in accordance with your home warranty).  By the time you want to sell in seven years, they will be nice and tall. Red tip photinias are a popular shrub to create a hedge.
  3. Conduct regular, annual maintenance on your air conditioner and furnace to keep them in top shape and prevent problems (like a leaky drip pan).
  4. Secure your doors properly by changing the 1″ screws in your strike plates to 3″ wood screws. You may want to secure your windows with security film as well. Learn more
  5. Keep a binder with all your home improvement and repair receipts so that you have a record for when you end up selling this home.

One final note: If you ever sell this home, make sure the new owner’s transfer the builder’s warranty into their name…it doesn’t (usually) transfer automatically.

Negotiating Advice for Home Buyers

Here are some helpful tips for Buyers when negotiating a sales offer on a home:

  • Find out the number of days the house has been “on the market” (also referred to as DOM: Days on Market) as well as the pricing history of the home. In Texas, only members of the MLS will have access to this data…it is not publicly available.

NOTE
You cannot use Trulia or Zillow or public tax information to find this information because Texas is a “non-disclose” state on real estate sales figures. Tax records are not accurate sources of real estate sales figure either…the appraised value of a home for tax purposes is usually not related to the actual value or price of the home.

     

  • Ask the Seller’s agent why the home owner is selling the home. That agent does not have to answer the questions (due to client confidentiality) but typically will. This helps you understand the Seller’s motivation behind the sale.
  • Make sure your Realtor does a Buyer’s CMA (comparative market analysis) to determine the current, probable value of the home. This will prevent you from over-paying for the home and will also prevent you from wasting your time. For example, lender appraisals these days in our area tend to the conservative side. If a Seller is demanding a price that is $50,000 over the current market value of the home, the lender will not loan the money to you to buy it, even if you are willing to pay it. You will either have to come up with the cash to pay the difference, or walk-away from the deal. Better to know earlier rather than later.
  • Do not belittle the Seller or the property to the Seller who has strong emotional ties to the home. As much as possible, minimize emotional responses on both sides.
  • Always make offers or changes to offers in terms in writing…Texas requires written contracts in regards to real estate.
  • If you view a home when a Seller is present, be as friendly and positive as possible. Sellers like to sell to people they like.
  • Do not start mentally decorating the house or arranging furniture in too much detail until you have a deal in writing…be ready to walk away. This is the biggest financial investment you may ever make…stay as rational as possible.
  • Don’t get hung up on a few hundred or even thousands of dollars and lose a deal.  You don’t want to lose a good deal on a $500,000 home over a $300 survey (for example).

What Is a Real Estate “Closing”?

A real estate “Closing” is where you and I meet with some or all of the following individuals: the Seller, the Seller’s agent, a representative from the lending institution and a representative from the title company, in order to transfer the property title to you. The purchase agreement or contract you signed describes the property, states the purchase price and terms, sets forth the method of payment, and usually names the date and place where the closing or actual transfer of the property title and keys will occur. 

If financing the property, your lender will require you to sign a document, usually a promissory note, as evidence that you are personally responsible for repaying the loan. You will also sign a mortgage or deed of trust on the property as security to the lender for the loan. The mortgage or deed of trust gives the lender the right to sell the property if you fail to make the payments. Before you exchange these papers, the property may be surveyed, appraised, or inspected, and the ownership of title will be checked in county and court records.

About a week in advance, I will schedule the real estate Closing with you and the title company. We will meet at the title company on the day of closing, sit in a conference room with an escrow officer (who is also a notary), and you will sign the legal documents to purchase the home.

You will need to bring your driver’s license with you to the real estate Closing. At closing, you will be required to pay all fees and closing costs in the form of “guaranteed funds” such as a cashier’s check.  Your agent or escrow officer will notify you of the exact amount at the day before Closing.

 homebuyingcosts

 

Buyers: What To Bring to Your Closing Appointment

Here’s the minimum of what to bring to your “Closing”:

  • Photo ID
  • “Good funds” for your down payment and other costs: typically
    a cashier’s check—never cash

 

Home Warranties

When you purchase a resale home, you can purchase a home warranty (a.k.a., Residential Service Contract or RSV) that will protect you against most ordinary flaws and breakdowns for at least the first year of occupancy.  The warranty may be offered by either the Seller, as part of the overall package, or by the agent.  Even with a warranty, you should have the home carefully inspected before you prchase it.

A home warranty program will give you peace of mind, knowing that the major covered components in your home will be repaired if necessary.  Here are the major RSV providers:

 

NOTE
If you need help deciding, check out http://www.homewarrantyreviews.com/reviews but keep in mind that the bigger companies have more complaints because they have millions of customers and people are more likely to complain than express their satisfaction. “You can’t please all the people all of the time…”

I can say from personal experience that I no longer recommend First American Home Buyers Protection…they have terrible customer service these days and send terrible, low-quality vendors to perform the work.

 

Texas Home Inspections for Buyers

Please know that a home inspection is one of the most important parts of buying a home. But it can be overwhelming trying to find a reputable inspector who you can trust. I provide all my buyer clients with a list of licensed home inspectors in the area to make this process easier for you.

In Texas, the inspection phase is referred to as the “Option Period.” Watch my video for an explanation…

 

The inspection should include information (including photos) on the condition of the following:

  • Appliances
  • Plumbing
  • Electrical
  • Air conditioning and heating
  • Ventilation
  • Roof and Attic
  • Foundation
  • General Structure
In choosing a home inspector, consider one that has been certified as a qualified and experienced member by a trade association. Ask if they: a) measure the foundation levels, b) check walls and ceiling with thermal camera, c) provide color photos in report. Also get them to hire your termite inspection. 
 
Most of the time, home inspectors will advise you to have an HVAC specialist check the AC and furnace. If you think this will be an issue, you should set that appointment up in advance as well. I recommend Hartford Services at 281-261-3333.  

Keep in mind that NO HOME IS PERFECT…not even new construction. The inspection is designed to report on any potential defects or problems with the home that may require repair. Not everything they report will be considered an actual defect by you; you must decide on whether or not the items noted require repair or not for your peace of mind. For example, I rarely see a home inspection report where the inspector does not note that the dirt is too high around the foundation of the home. This seems to be something that they always note because it could potentially hide termite activity around the home…and inspectors have to protect themselves against potential lawsuits. But this is something that you can easily fix when you move into the home.

NOTES

  • Should serious foundation or structural problems be indicated, the inspector will recommend that a structural engineer or other professional inspect it as well. This may include hydrostatic testing (which requires special permission from the Seller).
  • Stucco inspections are very important and require special permission from the Seller.
  • The home cannot “pass or fail” an inspection, and your inspector will not tell you whether he/she thinks the home is worth the money you are offering.

 

According to the Texas Real Estate Commission: “A home inspection is a limited visual survey and basic performance evaluation of systems and components of the house. It does not require the use of specialized equipment and is not a comprehensive investigative or exploratory probe to determine the cause or effect of deficiencies noted by the inspector.”

I recommend being present for the last hour of the inspection. (It distracts the inspector if you are there the entire time, and then they miss things.)  This is to your advantage because you will be able to ask questions, and get tips for maintenance, and a lot of general information that will help you once you move into your new home.  Most important, you will see the home through the eyes of an objective third-party. But always keep in mind that an inspector’s job is to report on all potential issues (like dirt around the foundation) and you need to be reasonable in your repair request negotiations with sellers.

Once the inspection is completed, you will have three options to take (*assuming you purchased an Option) in the original contract:

  1. Terminate the Contract – If any serious defects are found with the home, then you can exercise your Option*, lose your Option Fee, but get your earnest money back. 
  2. Ask for Repairs – If you do not have the cash on hand to make the repairs that you deem important, then you can ask the Seller to make those repairs in an Amendment to the sales contract. However, keep in mind that this is not recommended because home owners tend to hire the cheapest repairs possible and it’s not guaranteed that repairs will be done in a satisfactory manner.
  3. Ask for a Seller’s Contribution to Closing Costs – If you would rather ensure the repairs are done to your satisfaction, then request a Seller’s Contribution to Closing Costs (SC) which is a credit at Closing that will provide you with more cash on hand, after the completion of the sale, so that you can hire your own repairs.

Never send an inspection report to your lender and avoid putting a long list of repairs in an Amendment, or it may impact your home loan.

 

Why Rent When You Can Own?

  • Are you unsure about becoming a HOMEOWNER?

  • Thinking that you can’t afford to BUY a home?

  • Are you worried about whether home buying is a good INVESTMENT?

Buying a first home can be an intimidating process. But the first step is making those first decisions: I want to own my own home; I can afford to own my own home; owning my own home makes sense for me financially and emotionally. If you are still struggling with those first decisions, here are some facts that might help you make that first step towards becoming a homeowner.

You Can’t Afford NOT to Buy a Home!

Over the last ten years, the cost of rental housing in the U.S. has increased an average of 3 percent per year. That means that an apartment or home renting for $750 per month will cost more than $978 a month in ten years. If you rent the same home for ten years, the total amount you would pay for rent will equal $103,000! 

why_rent_when_buy1

Tax Advantages of Owning a Home Result in Savings

None of that $103,175 is returned to you, either through savings or as an investment. Homeownership, on the other hand, has tax advantages over renting a home, and those advantages can help you save money. Unlike your monthly rent, part of your monthly mortgage payment “comes back to you” in tax savings. Here’s an example:

You purchase a home that costs $110,000 (plus closing costs – expenses incurred to actually process the transaction). You finance the balance with a 30-year fixed rate mortgage at 6.5 percent interest. Your monthly payments (not including utilities, maintenance, insurance, etc.) are:

why_rent_when_buy2

why_rent_when_buy3

You actually save $195 a month by owning your own home. On a yearly basis, the savings is even more dramatic: 

Homeownership is a Good Investment

For the majority of Americans, their home is their largest financial asset and a major player in their investment portfolio. It’s a good thing, too, since stock market value has declined since 1998, while home price appreciation has increased. The NATIONAL ASSOCIATION OF REALTORS® estimates that home value rises, on average, by 4.5 percent a year. That’s a steady return on investment; one’s own home is a much less volatile asset than stocks, bonds or mutual funds.

why_rent_when_buy4

As an example, let’s look again at that $110,000 home. Unlike your rental unit, your home should appreciate over time. Assuming a 4.5 percent appreciation rate, your home will be worth $114,950 in the second year of ownership, $120,123 in the third year of your owning it, etc. After ten years, your $110,000 home will be worth $163,470. Not only do you earn a rate of return on your original purchase price, but you also get a return on any subsequent appreciation.

why_rent_when_buy5

Homeownership Builds Wealth for Households

The Federal Tax Reserve Board estimates that homeowners have a net worth almost 36 times more than that of renters. In 2001, the median net worth for homeowners was $171,700 compared to $4,800 for renters. How do you build up your net worth? Through those “appreciating returns” on your home.

We’ve already seen how your $110,000 home is worth $163,470 in ten years. In addition, you are paying down the principal on your mortgage. Remember that $100,000 you borrowed at 6.5 percent over 30 years – that debt amount is decreasing every month and every year.

why_rent_when_buy6

After the first year, you now only owe $98,786 on a home that is worth $114,950. You have “netted” a $4,950 increase in the value of your home, plus $1,116 a year that previously you owed as part of your mortgage debt. As your debt decreases and the home value increases, you accumulate wealth from the value of your home. In addition, over this ten-year period, you will have a significantly lower after-tax payment for housing. Each year as your home appreciates and you continue to pay down your mortgage debt, you increase your own net worth.

Homeownership – It’s NOT Just About Money

The “numbers tell the story” should ease your mind about the financial aspects of becoming a homeowner. But there are other, less monetary, benefits to homeownership. Several research studies indicate homeownership adds to the value of communities, has positive effects on children, and even contributes to increased voter participation rates.

Courtesy of: NATIONAL ASSOCIATION OF REALTORS®

Prior Foundation Repairs

Will Prior Foundation Repairs Effect a Home’s Resale Value?

In Texas, there is a saying that all houses here either have foundation repairs or will need them in the future. That’s because the soil in most parts of Texas is an “expansive soil” that significantly expands and contracts based on the level of moisture in it. And since Texas is known for either droughts or floods…our soil tends to expand and contract a lot.

Here is a must read for Texas home buyers: Buyer’s Guide to Slab-On-Ground Foundations by R. Michael Gray, P.E. and Matthew T. Gray, EIT.

That is why it is very important for homeowners to keep the soil around their home evenly watered. Water in the soil provides pressure to support the home. During a drought, the lack of moisture may cause a foundation to sag. Simply watering the soil can often push a slightly sagging foundation back up…no kidding!

Does having a prior foundation repair on a home effect the resale value? That’s a controversial question with no “scientific” data to prove one opinion or another. Some say that as long as the repair is done by a reputable foundation company and has a transferable lifetime warranty…no problem. It may even be considered a positive feature of the home, since the cost of the repair has been covered by a prior owner.

NOTE: If you need some brick or mortar repair in the Sugar Land area, contact JQ Brick at 713-253-5092…they do excellent work at very reasonable prices.

brickrepair
These kinds of cracks do not necessarily mean there are foundation issues…bricks and mortar crack very easily.
They do need to be resealed, however, with mortar (not caulk) to prevent water penetration into the side walls.
Call JQ Brick at 713-253-5092.

Others know that inexperienced home buyers may be scared of purchasing a home with prior foundation repairs…and will not even give such a home a second glance. So, by reducing the number of prospective buyers for a home this way, it could have a negative impact on the price per square foot that home can command. That would suggest that a home buyer should not pay a neighborhood’s top price/square foot for a home with prior foundation repairs…unless there are other special features that significantly override the foundation issues.

Read other opinions:

 

new construction

Buying New vs. Resale Home

One question that I get a lot is, “Should we buy a new home or an existing home?” A new home is one that has never been lived in while an existing home has been lived in by a previous owner. There are Pros and Cons either way that you should consider. Here are my home buying tips for purchasing a new versus resale home.

PROs for Purchasing a New Home May Include:

  • Lower maintenance costs during the first years of owning the home.

  • Lower energy costs because new homes are built with better energy saving materials and equipment than older homes.

  • More functional home designs and floorplans as well as up-to-date home fixtures.

  • Latest technology features such as pre-wired for a home computer network.

  • Possibly the ability to choose paint colors, floor types and colors, exterior colors, and other optional home features.

NOTE: There is typically a substantial markup on these items.

  • Builder incentives to lower the initial cost to purchase.

  • Easier to get to know neighbors because everyone is “new.”

 

PROs for Purchasing an Existing (Resale) Home May Include:

  • Lower price per square foot than newly built homes.

  • Better locations and shorter commute times.

  • Mature landscaping in both the yard and throughout the neighborhood.

  • Proven track record of home values in the neighborhood.

  • Lower tax rates since more neighborhood features have already been paid for by home owners.

  • Sales contracts that are fair to both parties…not one-sided in favor of the builder.

  • Lower move-in costs (possibly) since home already has window coverings, landscaping, garage door openers, and other items that you will have to buy for a brand new home.

  • Easier for home inspector to find home defects because more time has passed since the home was constructed. NOTE: New homes may have hidden defects that are impossible for a home inspector to find.

  • More established school zone boundaries than for new neighborhoods.

  • Established community activities and events.

  • Quicker move-in date compared with building a home from scratch in a new neighborhood.

If you decide to buy a new home, make sure that you check out the builder first: http://houston.bbb.org/consumers/. Also make sure that you hire an inspector (read http://www.best2inspect.com/buyersguide.html for more information). And don’t forget to bring your Realtor along when you view new home models! Remember: A Realtor’s job is not “just” helping you find a house to buy…there are over 100 tasks that Realtors may perform for you during the home purchase process! Your Realtor should be on your side because she is your agent. The salesperson at the builder’s model home office is not on your side…as an employee of the builder, he or she is looking out for the builder’s best interest.

Before you decide to buy a new home, make sure you get up-to-speed on new home builder’s warranties at  http://www.fairarbitrationnow.org/content/home-court-advantage-how-building-industry-uses-forced-arbitration-evade-accountability (scroll to the bottom and then click “Read the Full Report.”

You will also find these articles interesting:

I don’t want to discourage you from buying a new home…Houston has some really great new home builders. But it’s my job to make sure that you have all the information that you need to make a wise buying decision. 

NOTE: The Following rankings are from JD Powers 2010. I’m not aware of a more current list.

houston_home_builders_rating1

houston_home_builders_rating2

 

Checklist of Steps for Buying a Home

This list is not comprehensive. There are a lot of steps that your REALTOR® takes care of behind-the-scenes.

Call Sheila Cox for help at 832-779-2890

 

 

√

Action Item

Deadline
 

Unless you have cash to buy a home, contact three or four lenders to determine how much house you can afford and get rate quotes.

 
 

Determine how much money you will need to purchase a new home. Do you have enough? If not, create a budgetand start saving now.

 
 

Get approved for a loan. Don’t forget the approval letter! We will need to submit it with an offer to buy a house…Sugar Land sellers will not typically accept an offer without a strong approval letter from a reputable (preferably a local lender).

 
 

Hire a Sugar Land real estate expert to help you with your purchase. You need a professional looking out for your best interest!

 
 

Do you need to sell your current home? Your Sugar Land real estate expert can help you with that too (and may offer a discount if you both buy and sell).

 
 

View homes that meet your specific needs.

 
 

Choose the right home for your needs.

 
 

Sign the legal paperwork and make an offer to buy the house that you chose. Be prepared to write two checks (which will be cashed): 1% earnest money to Title Company and $200-300 option fee to the Seller.

 
 

After the purchase offer is accepted, hire home and termite inspectors to check the home. This will cost $300 to $500.

 
 

Negotiate repairs to home as needed.

NOTE: If you are using an FHA loan, have all “conducive” termite conditions resolved to prevent loan problems.

 
 

Decide whether or not to exercise your Option. If you decide to continue with the purchase, the go to next step. Otherwise, return to viewing homes that meet your needs.

 
 

Tell lender to order the appraisal. Be prepared to pay an appraisal fee (approximately $400)…or it may be rolled into Closing costs.

 
 

Turn-in items for your loan application (W2s, tax returns, pay stubs, bank statements, etc) to lender as quickly as possible. Be prepared for a hassle! The lending process is very stringent these days.

 
 

Check your Title Commitment when you receive it…especially Schedule C. You typically have 5 days to “object in writing.”

  
 

Will both buyers be at the Closing? If not, order a Power of Attorney with your lender…it has to be approved by lender and title company ahead of time.

  
 

Obtain home owner’s hazard insurance. Make sure you get at least three quotes because rates can vary drastically. They will want the age of roof, your birthdates, current address, and more.

 
 

Make sure the survey is ordered in a timely manner, unless it is provided by the Seller. NOTE: Know the 10 Common Pitfalls to Closing on Your Home.

 
 

Make sure the HOA compliance inspection and resale certificate are ordered in a timely manner (if applicable).

  
 

Select your residential service contract (“home warranty”).

 
 

Make sure all negotiated repairs are made in a timely manner.

  
 

Plan your move and order your utilities to be turned on the day you Close.

 
 

Make sure your Closing is scheduled with the Title Company.

  
 

Do your final walk-through the day before/of Closing.

 
 

Go to the settlement Closing. Each person signing (husband and wife) will need a photo ID and a cashier’s check or wiring instructions.

 
 

Move into your new home and enjoy!

 
 

Check out these tips for decorating, remodeling, and updating your new home.

 
 

Make sure you receive a copy of your Deed (from the Title company) within a couple of weeks after Closing.

 

 

price home

Pricing a Home Correctly

Pricing a home is more complicated than simply comparing the list price to the sales price. Clients often ask me how much they should pay for a home, and I tell them, “It depends on how much it’s worth!” For example, if a house is listed at $450,000 and you get it at $400,000 that may seem like a good deal…but not if the market data says it’s only worth $350,000. (I’m using large numbers here to make the point.) Similarly, if a house is listed at $450,000 and you get it for $450,000, but the market data says it’s actually worth $500,000…then you got a  good deal, even though you paid “full price.” See what I mean? 

By the way…that new home specialist at the builder’s model home you like will tell you that the $440K model home was originally listed at $520K…sounds like a great deal, right? But they won’t tell you that the last five homes they sold, with that exact floorplan, had an average sales price of $400K. But I will! I’m looking out for you…not the builder.

 

Home Value Is Not About Price Per Square Foot

Pricing a home is complicated because real estate market data is changing every month…so home values are changing every month as well. In addition, there is not one price/sf price for an entire neighborhood. Smaller homes in the same neighborhood will typically have a higher price/sf than larger homes in the same neighborhood. Homes with swimming pools and waterview lots are generally worth more in the same neighborhood than homes that don’t have those features. Three-car garage homes are worth more than two-car garage homes in the same neighborhood.

Pricing a home correctly is complicated…you can’t just work off of averages or price/sf. There is no “Kelly Blue Book” value for homes! When determining the value of a home, you should compare at least three recently Sold price (not asking prices) for homes that are comparable to the house you want. Comparable means the houses are all within the same size-range (+/- 300sf), have a similar number of bedrooms and bathroom, have similar garage sizes, have similar types of amenities and lot types, etc. Usually you will not find three homes that are exactly the same as the subject property, so adjustments must be made to the prices, and then the adjusted prices are averaged out. This gives you a good idea of a home’s current market value. See the example below.

CMA

By the way, cosmetic items such as granite counter tops, hardwood floors, updated light fixtures, special colors of paint…those items do not add value to a home. Appraisers do not make adjustments for cosmetic items. Other items that buyers like, such as a new roof, new HVAC system, beautiful landscaping…those types of items are rarely adjusted either because appraisers (and buyers) expect the home to have a good roof and working HVAC system. Those items may help a home sell faster, but they do not usually add value on an appraiser’s report.

 

 

New Construction Homes Cost More Than Comparable Resale Homes

New construction homes in a neighborhood make pricing a home correctly more challenging. Technically speaking, investing in a home is very different from investing in an automobile. Homes and real estate are generally “appreciating assets” while cars are generally “depreciating assets.” However, trust me when I tell you that no home buyer on the planet is going to pay the same price for a “used” one-year old home when they can buy a “fresh,” brand-new, never lived in home…where they get to choose all the finishes (paint colors, floors, counter tops, cabinets, etc.). Buyers like that “new home smell” just the same as they like that “new car smell.” And they are willing to pay a premium for the “new home smell” just like they are willing to pay a premium for the “new car smell.”

We all know a car loses value the minute you drive it off the car lot. Likewise, that a new construction home typically loses its value (at least in the short run) the minute that you move in. So do not compare new construction prices with a resale home prices when determining value.

And be prepared to sell your home for less than you paid for it if you bought it from a builder…at least until the builders move out of the neighborhood (and no new construction homes are available) or at least five years (or more) have passed since you bought it from the builder. It is almost impossible to compete on price with home builders when you are selling a resale home. They offer lots of “buyer incentives” to entice buyers to purchase…and they can offer a buyer something you can’t…a never-lived-in-home.

It can be hard to determine what new construction homes are selling for because builders do not always list them on the MLS. Since Texas is a non-disclose state, home builders can sell homes without ever reporting them to the MLS. This often conceals the fact that homes lose value after they are purchased by a builder. 

I know that some home sellers think their home is “better than new” because they have done this and that to the home. Home sellers like to price a home based on new construction home prices. But just like a used car, a used home is not usually worth as much to a buyer as a new construction home. 

 

Home Should Appraise for Sales Value

If you are like most home buyers, you are going to get a loan in order to buy a home. That means the lender’s appraiser is going to have a say in how much you can pay for a home. This is something that home buyers and sellers have to be reminded about. It really doesn’t matter if you are willing to pay $450,000 for a house if the lender’s appraiser says it’s only worth $420,000…unless you want to pay the $30,000 difference at Closing.

Remember that a lender is making an investment in you and your home when they loan you money to buy a house. They want to make sure the home is a good investment. They don’t want to invest more than the item is worth. Always keep this in mind when you are applying for a loan.

Always make sure you have a way to get out of the deal if the home doesn’t appraise for the sales price. That will give you leverage to renegotiate the price if the appraisal comes in too low. If you have a back-out addendum in place, and the appraisal comes in too low, then you have four options:

  1. Get the Seller to come down in price to the appraised value
  2. Meet the Seller somewhere in-between the sales price and the appraisal price (but you will have to pay your share of the difference at Closing)
  3. Pay the difference between the sales price and the appraisal value at Closing…on top of your other down payment and Closing costs
  4. Back out of the deal (but then you will not get back all the money you spend on inspections, appraisal, etc.)

Some people think they will be able to terminate a transaction if the appraisal comes in too low because they believe a lender will not approve the loan in that case. This is not, necessarily, true. If you have enough cash on hand to pay the difference, then the lender may still approve the loan.

 

Price Analysis

Pricing a home based on the “tax rolls” and tax appraised values does not work in Texas. Tax appraised values are usually not accurate for market value in this state. Plus, Texas is a non-disclose state and only members of the MLS have actual sales data. And even Zillow only gives themselves 1-star on their Zestimate’s accuracy (see here). 

zestimates not accurate

There is a method for doing a proper Comparative Market Analysis for a home that is similar to how a lender’s appraiser is going to determine a home’s value. Hire an experienced agent who knows what they are doing!

As your Buyer’s Agent, when you find a home you want to make an offer on, I do a complete CMA (Comparative Market Analysis) and provide you with the data that I have, to determine the realistic and accurate price for a home. This method is similar to how lender’s appraisers value a home. That way you don’t find yourself wasting a lot of time on a home that will not appraise for sales price.

Read more about “Buyer’s Agents”: The Agent Showing You Houses May Not Be Your Agent

 

Negotiating Price When It’s Too High

Often times a home is listed at a price that is considerably more than the CMA value. For example, a home that just hit the market may be listed at $550,000 and the CMA, which is based on comparable homes SOLD in the past six months) says it is only worth $500,000. But you, the Buyer, really want the house. What do you do? Well…

Neither the Buyer’s Agent or the Listing Agent can make a seller accept your reasonable offer. And if the house just hit the market, then it’s possible that the seller hasn’t “come to their senses” yet. Sometimes it takes time for a home seller to see that their home isn’t worth what they want for it. If the house sits on the market for months, then sellers either decide to lower the price (hopefully) or they take the home off the market, because they find out they can’t get what they want for it at the current time. (So they will wait.)

I have seen it time and again where a Buyer’s Agent shows the Listing Agent their data for the $500,000 offer and it doesn’t matter…until months go by. Then, eventually, the Seller finally sells the home at the price you offered (or lower)…after letting it sit on the market for 6 months. It is often the case that only TIME can motivate a seller to accept a reasonable offer.

So what do you do if you really want a house that is overpriced? 

  • Do you have time to wait? If so, give it a month or two and hope that another buyer doesn’t beat you to it. If you don’t have time to wait, then move on and find another home.
  • Pay the higher price. Sometimes it is worth paying more for a house to get what you want, when you want it. And besides…paying a higher price helps raise the prices in the neighborhood…thereby increasing the value of your investment.
  • Take a risk and offer the price the seller will accept while hoping the appraisal will come in low so you can renegotiate. Use the lender’s appraisal as your “checks and balances” for the price. This strategy can only work if you have the right to back out of the transaction if the appraisal comes in low. 

Sometimes an appraisal comes in much higher than what a Buyer’s Agent thinks the house will appraise for. This may be because the market has changed in the 4-6 weeks between the time the agent did the CMA and the time the appraisal is done..and more homes sold in that time. Or sometimes it seems that appraisers choose odd “Comparables” to make the appraisal come in higher (or lower). You just never know what a lender’s appraiser will do when valuing a home.

 

Negotiating Tips for Buyers

Here are some tips to help with negotiations:

  • Don’t let yourself “fall in love” with a house, making detailed plans for remodeling and decorating, before you have an executed contract. If you are emotionally attached to the home, then it will be harder for you to walk away from an over-priced home.
  • Don’t expect to get a seller to go down substantially in price when the house has only been on the market for a few weeks. Be willing to pay a reasonable price instead of getting a “killer deal” on a house that just hit the market.
  • Don’t low-ball a house in a HOT market when you may get in a competitive situation with other buyers. Be willing to pay a reasonable price (or slightly more) because other buyers will be willing to do so.

There is a funny saying in real estate: “You can’t fix stupid.” That’s just an irreverent way of saying that your Buyer’s Agent can’t prevent other buyers from overpaying for a home. Cash buyers commonly pay way too much for a home because they don’t have a lender’s appraisal holding them back. And you don’t know what the other buyer’s circumstances and motivation are…maybe they are too desperate to be conservative about price.

  • Always consider your “next best alternative” when making pricing decisions. If you are desperate to get a home because you have to move in six weeks, and you have been looking for several months without finding anything else that you like, then be willing to pay more to get what you want. Likewise, if you are not being forced to move in a short-time frame, or you have seen lots of other homes that you like, then you can be “stricter” with the price you pay for a house.
  • Do not take the CMA value of a home and then subtract from it all the cosmetic changes (paint, flooring, landscaping, pool, etc.) that you want to make to the home. It doesn’t work that way. Cosmetic items do not, generally, effect the value/price of a home. 
  • Remember that both CMAs and Appraisals are opinions of market value. If you have three different appraisers do an appraisal on the same home at the same time, you will probably end up with three, different values. 
  • Always remember that the price you pay effects the prices in the neighborhood where you are buying and investing. Driving too hard a bargain on your future home can have a negative impact on your home’s value too.

 

Beware of Internet Real Estate Statistics

The bottom line: No one knows an area better than a local, experienced real estate agent. Don’t gamble your biggest investment on automated Internet data.

It’s Not All About the ZIP Code…Or Shouldn’t Be

I love the Internet and I’m an information junkie, but I am constantly amazed at how WRONG the real estate info presented on the internet is for my area: Sugar Land TX. Sugar Land is a large city (population 85,000+) located in in Fort Bend County, just southwest of Houston TX. Like all cities of its size…some parts are very different than other parts…it is not completely homogeneous. Furthermore, it consists of multiple ZIP Codes: mainly 77478 and 77479 but new comers, 77487 and 77496, have been added. And, Sugar Land is adjacent to Missouri City, Stafford, Houston, and Richmond as well. So you can live is the Sugar Land area but technically have a Missouri City or even Houston address.

What really “bugs” me about the data available on the Internet is that most websites use ZIP Codes to determine demographics and “city data.” But you can’t do that accurately in Sugar Land since it has multiple ZIP Codes. And to complicate matters, Sugar Land is divided into multiple master planned neighborhoods and each of those may be split into multiple subdivisions. For example, First Colony consists of over 100 subdivisions, New Territory over 40 subdivisions, Greatwood and Riverstone are also divided into multiple (over 20 each) subdivisions. So you can have multiple neighborhoods and subdivisions within the same ZIP Code, but let me assure you that the demographics and average income for homes in Sweetwater is drastically different than those in Settlers Park (two subdivisions in the same ZIP Code).

Here are some examples that “bug” me…

At the time the above data was posted on the Internet, I checked the Multiple Listing Service (MLS) database which reported a median list price at $329,000…not $349,440 (as shown above). And besides that…I assure you that we have many subdivisions in Sugar Land where you can purchase a home for much less than that price! Or much more! So what’s the point of this information? And the “median” for 77478 is probably not accurate for a specific home in a specific subdivision.

From MLS

NOTE: Home prices are a constantly moving target…even within the same subdivision. The averages, medians, and such change monthly…depending on current market activity. You have to evaluate the value of a home at the time you are making a purchase. (Which is one of the main services that a real estate agent should provide.) Home appraisals are professional opinions only and are typically only considered accurate for six months.

Neighborhoods Need to Be Properly Defined

At least NeighborhoodScout is trying to look at the neighborhood level (see below)…but they fail miserably. The sections they have segmented are not actual Sugar Land neighborhoods…some sections contain multiple neighborhoods…so the data can’t be applicable for a specific home or subdivision. For example, if you click the area that is supposed to be for Telfair, you will see it includes part of First Colony and those subdivisions are zoned to different schools than Telfair. (And trust me when I tell you that schools are one of the most important variables in determining home values in our area!)

Inaccurate Data Misleads People

Here’s my least favorite source of data (city-data)…notice they report only 9 registered sex offenders in all of 77479. We wish!

FamilyWatchDog reports and maps 64 (unfortunately)!

I REALLY don’t like most of the info on city-data because it reports information from any unknowledgeable “joe” who wants to put it up there. For example, I searched for “telfair sugar land demographics” on Google and the top entry was a city-data thread. In it, various and misleading demographics were reported…

  
  Not accurate at all!

 

FBISD also consists of Houston addresses…not at all accurate stats for Sugar Land.

I think the City of Sugar Land has the best info on actual demographics for the city…they are getting it from the census data.

Each Neighborhood and Subdivision is Unique

As mentioned, each Sugar Land neighborhood may be zoned to multiple schools…depending on how large it is. For example, New Territory is zoned to two different high schools…one a highly rated and popular high school, the other, not so much. So if you want to live in New Territory and be zoned to the best schools, you will have to focus on the east side of Grand Parkway, and not the west side. But only a real estate agent can perform filtered searches that are complicated enough to search that way for home buyers (saving them time and frustration).

The hard fact is that you can’t really get accurate census type data at the neighborhood or subdivision level. Relying on the data for an entire ZIP Code in our area may be very misleading when it comes to the neighbors you will eventually live next to. The best alternative is to look at the demographics for the Sugar Land schools to which a home is zoned.

Only an Experienced Local Real Estate Agent Can Narrow and Focus Your Search

So if you are a home buyer in the Sugar Land area, you really need the guided expertise of a local real estate agent you can trust to help you buy a home in the RIGHT neighborhood at the RIGHT price. No online searches available to the general public–including HAR.com, Trulia, Zillow, Homes.com–none of them will allow you to do the complicated and focused searches that a real estate agent can perform. Today (October 15, 2013) there are approximately 325 active listings in Sugar Land reported on the MLS. Do you want to sort through all of them or do you want to focus on the top 20 that most closely match your requirements? And maybe you want to live in the Sugar Land area, but a Houston or Missouri City address will do.

Most Online Real Estate Pricing Data is Not Entirely Accurate and Should Not Be Relied Upon

Let me add that Texas is one of 14 non-disclose states. That means that real estate data is not public information…so the online companies like Zillow and Trulia don’t have access to real data. They use tax appraisal values which are usually lower than actual home values. So don’t rely on them! And since online companies can’t get the real MLS data, they report erroneous information. Here’s an example…

Here’s the data reported on Redfin on October 15, 2013…which says it is for the last 90 days and focused on one of our most popular neighborhoods: Telfair.

I ran the sales history on the MLS for the last 90 days, and got the following data. 
The top box is for Active Listings and the bottom box is for Sold properties.

So let’s look at the differences…

  Redfin Reported MLS Reported
Median List Price $502,946 $507,440
Median $/Sq Ft $143 List = $143.68 but 
Sold = $133.28!
Median Sale/List 96.5% 97%
Avg # Offers 1.0 No way to know!
Avg Down Payment 20% No way to know!
# Sold Homes 48 54

My first complaint is that two reported variables are almost impossible to determine: Avg # Offers and Avg Down Payment.Agents do not report the number of offers on a home. They only have to report an offer when it is accepted and goes “Option Pending” or “Pending” (and sometimes they don’t even do that.) So that variable is completely unreliable and shouldn’t be reported at all.

The Avg Down Payment bothers me too. Agents are supposed to report that number at Closing (when a house sells), but you would have to look at every single transaction (54 over the past 90 days) to record those numbers. I don’t see how Redfin could automate that for every neighborhood…so I don’t trust that number either.

Notice the Median List Price is off by $4,500 and the # Sold Homes is off by 12.5 percent. Also, they report the Median $/SqFt for List Price only…but notice that the SOLD SalesPrice$/SqFt is $10.40 less! So if a buyer used the number Redfin reported to price a 3000sf home, that could have led to the buyer overpaying by $31,200!

NOTE: It really doesn’t matter what the median list price is for a neighborhood…only the sales price should be used to price a home you want to purchase.

And then that gets me into a price discussion which is too complicated to address here. But let me point out that this the median SalesPrice/SqFt and the house you may want to buy could be an above-average home or a below-average home. Do you want to pay the average price for a below-average home? Do you think a seller will accept an average price for an above-average home? The best way to get an accurate view of the value of a specific home at a certain time is to hire a professional appraiser or to engage a really good real estate agent. Not all real estate agents are good at pricing homes…you need a PRO!

 

option period

Option Period and Fees in Texas Real Estate

We handle inspections in a very unique way in Texas. When you write a contract to purchase a home in in Texas, you can buy an “option period” (usually 7-10 days, negotiable) from the seller for $200-$400 (negotiable) that gives you the irrevocable privilege to back out of the sales contract for any reason, and still receive your 1 percent earnest money back. (During this time, the Seller cannot back out of the contract…only the Buyer has that  right.)  

NOTE: The $200-400 Option fee is paid directly to the seller…usually via a personal check. So when you sign the contract to purchase a home, you will give your real estate agent two checks: 1) Option fee check payable to the Seller, and 2) Earnest money (usually 1 percent of sales price) payable to the Title Company. Your agent will deliver both checks to the appropriate party and get a written receipt for proof, within 3 days of executing the contract. If the Option fee is not paid within 3 days, then the Option period does not exist and you are buying the home as is! Very important!

If you buy an Option period, it begins the day the contract is “executed” (signed and acknowledged by all parties). So you must be ready to get your inspections ordered ASAP. (Here’s a list of home inspectors.) Any and all inspections that you want to have done to the home must happen before the end of the Option period. In addition, if you find any defects that you cannot live with, then you must negotiate the repairs, or change in price, before the end of the Option period. At 5:00 p.m. on the last day of the Option period, if you have not had the Seller sign an Amendment agreeing to price modifications or repairs, then you are buying the home “as is.” Make sure you get your inspection reports several days before the end of the Option so you can review them and discuss with your agent and have time to submit an Amendment to the Seller.

In summary, the Option period gives you time to have the home thoroughly inspected and find any defects that you cannot live with. It also allows time to negotiate repairs with the Seller. At the end of the Option Period (and the timing is very strict) you can do one of the following:

  • If you “exercise” your option (and decline purchasing the home), then you lose your option fee ($200-500), but you get your 1% earnest money back.

—Or—

  • If you do not exercise your option (and continue the purchasing process), then the option fee is usually applied toward your closing costs.

Make sure you hire a real estate agent who knows how to properly handle Option Periods and protect your money.

 

Costs To Buy a Home in Texas

Do You Know What It Costs To Buy a Home in Texas?

It’s one thing to want to own your own home…it’s another to be able to afford one. Here is a run-down of estimated costs to buy a home in Texas you must consider…

NOTE
Please note these are estimates only and will change based on the area where your home is located, price of home, lender requirements, negotiated terms on sales contract, etc.

 

Item

Cost*

Application fee for loan

$300

Credit Report Fee for Lender

$65

Option Fee

$200-400

Earnest Money

1% of house price

Home Inspection Fees (house and termite)

$600-1200

Appraisal fee

$350

Closing Costs:

 

     Down Payment for Loan

2 to 19% of  house price
(minus earnest money)

     Title Insurance (usually paid by the Seller)

$1377

     PMI or MIP Reserve**

$344

     Loan Origination Fee (negotiable)

$1900

     Survey

$400

     Flood Certificate

$40

     Doc Prep Attorney Fee

$200

     Settlement Fee

$250

     Recording Fees

$50

     Underwriting Fee

$200

     Tax Service Fee

$75

     Prorated Taxes

$1250

     Homeowner Insurance and Reserve

$2100

     Pre-paid Interest

$417

Repairs or Updates to Home If Needed

Unknown

Moving Charges

Unknown

Utility Fees

Unknown

*These estimated figures are based on a $200,000 house with a 5% interest conventional 30-yr loan, with 5 percent down, $1500 insurance, and $5000 property taxes…close to $20,000 cash required!

** If your down payment is less than 20 percent of sales price.

 

apply for loan

Applying for a Home Loan in Texas

Items Needed To Apply for a Home Loan

10commandments_loanApplying for a home loan these days is not for the “weak at heart”! It is a pain-in-the-neck process no matter how much money you have or which lender you choose. So mentally prepare yourself for a hassle, and you won’t be disappointed. ;-D

NOTE: Read The Perfect Loan File on Forbes for details.

There is a lot of paperwork required in order to obtain a home loan. Plus, you will have to provide much of the paperwork multiple times throughout the loan process because of new lending standards (Dodd-Frank Wall Street Reform and Consumer Protection Act legislation and the Patriot Act).

Lenders are now required to verify certain items several times through the process…so please don’t get offended or frustrated when they ask you for something that you have already provided them.

 

 

Here’s what you will probably need to apply for a home loan (aka, mortgage):

  1. Proof of identity for borrowers including driver’s license and Social Security number.
  2. Address history for three years.
  3. Copy of tax returns for past 2 years.
  4. Banks names and numbers for all checking and savings accounts.
  5. Bank statements for the past 3 months.
  6. Documentation of all income including pay stubs for past 2 months.
  7. Proof of bonuses for 2 years if applicable.
  8. W-2 forms showing income for past 2 years.
  9. Job history for past 2 years.
  10. Net worth sheet with list of all assets and liabilities including account numbers.
  11. Most recent 401K statements and other retirement accounts.
  12. Copy of gift letter if applicable.
  13. If self-employed, copy of balance sheet.
  14. Divorce decrees if divorced in the past 2 years.
  15. Proof of residency, if applicable.
  16. College transcript if you were a student in the past 2 years.
  17. Bankruptcy discharge papers, if applicable.

 

What Not To Do

Maybe you’ve just gotten married. Maybe you got a raise … or maybe you’re just plain sick of renting. Whatever the case, you’ve decided that it’s time to buy a house. You’ll be given all kinds of advice and pointers about what you should do and how you should do it, but there are things you shouldn’t do that are equally important.

Don’t be deceptive or dishonest when you’re filling out your loan application. Even if you get away with fudging the numbers a little to secure a higher loan (which is loan fraud), what’s the payoff you’re looking for? A monthly payment that you can’t truly afford?

Avoid moving your money around. To eliminate potential fraud and provide a degree of quality control, a lender will review the source of funds for your down payment and closing costs. Most likely, you will be asked to provide recent statements for any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stocks, mutual funds, and even your 401K and retirement accounts. If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them, which could make it more difficult for the lender to document properly.

Once you’ve been approved for a certain amount, resist the temptation to make any big purchases that could affect your ability to service the loan. Examples might be a new car, a boat, or expensive furnishings.

Sure you may be able to afford the mortgage and a car payment, but what if an unexpected expense comes along that causes your monthly budget to become unbalanced—you’ve got a shiny new car, but you may have trouble affording that and gasoline, and the mortgage, and the utilities. You’re caught in a situation where you’ve over-extended yourself. Even if you’re able to make it work on a month-to-month basis, you may have trouble putting money to your savings account.

Sometimes, knowing what not to do is just as important as knowing what to do.

 

Big Bank vs. Local Lender

At the risk of offending anyone who works for a big bank…
 
Many people think that using their current “big bank” as the mortgage lender will speed up the process because “everything is in one place.” That is not true; it is a myth. My understanding is that all lenders have access to the same databases and such. I have been told that using your bank will not change the process or make it easier.
 
A “big bank” is Chase, Bank of America, Wells Fargo, etc. They may be great banks but, that doesn’t necessarily mean they are great mortgage lenders.
Please understand that you can use whichever lender you want. I highly recommend that you shop around and talk to multiple local lenders and your local credit union (if you have one). Always keep in mind that, to a big bank, you are only one customer in a million. They don’t really have to care that much about you, because you won’t really impact their business. In contrast, to a small, local lender or credit union, you are one in a hundred (or thousand), and very important to their business. Plus, local lenders know the local laws and procedures. Big national banks don’t necessarily know how things work in Texas. 
 
Another thing is experience. I highly recommend that you use a very experienced loan officer (aka, lender), which you can get at a local mortgage company. At a big bank, you may end up with a very inexperienced loan officer, in another state, who makes the process challenging, because he/she doesn’t know what they’re doing.
 
Check your loan officer at https://www.nmlsconsumeraccess.org.
Plus, real estate agents don’t like big banks as lenders, because of delayed Closings. In a multi-offer situation, if you have a big bank as your lender, and another buyer has a local lender, the seller’s agent may highly recommend the other buyer. I’ve had listing agents tell me they won’t accept an offer from a buyer using a big bank! (This has happened multiple times.) So always remember that the lender you use, is part of your competitive advantage.
 
When you have deadlines to meet, and your movers are scheduled to pick up your belongings, and you will have no place to live if you don’t Close on time, then the stress of a delayed Closing is very real. Big banks are notorious for delayed Closings. If you miss your Closing date, you could lose your 1% earnest money, but there are no consequences for the lender.
 
I’ve had several clients over the years, who didn’t listen to me, used their big bank, and had horrible experiences. I’ve had multiple clients call me crying, the week before Closing, due to all the issues with their big bank lender and a delayed Closing. I had a horrible experience once, when a Wells Fargo loan officer demanded that my client leave her mother’s deathbed to perform a task, and the bank STILL didn’t Close the deal…and my client’s mother died while she was away. (I closed my Wells Fargo account over that! Absolutely horrible experience.) Unfortunately, there’s nothing that I can do to help, the week before Closing, if you used a big bank lender. So I try to warn my clients in advance, to try to prevent these sad and stressful scenarios.
 
To be fair, I have seen a handful of deals, with big bank lenders, that went very well. However, several of them were for employees of the bank…who had the inside advantage.

Lenders to Consider

Lenders (loan officers) that my clients have used in the past:

Will Swallen​
Bay Equity
713.558.0364
www.LoanWithWill.com

 

David Krichmar
DaveYourMortgageGuy.com
832-689-6012

 

Deesh Nair
Motto Mortgage
Deesh.Nair@mottomortgage.com
914-844-7797

pays commissions

Texas Real Estate Commissions

Who Pays the Real Estate Commission in Texas?

One of the questions that I’m frequently asked is, “Who pays the sales commission in a real estate transaction?” That’s a good question! Here’s the answer…

how real estate commissions are paid

Typically, real estate sales commissions are paid at the closing table by the home owner (or builder). The title company disburses two checks out of the Seller’s proceeds from the sale: one to the Listing broker (such as a RE/MAX or Coldwell Banker) and one to the Buyer’s broker (in our case, Keller Williams Southwest). Then the Seller’s broker splits their sales commission with the Seller’s agent (also known as, the Listing Agent). And the Buyer’s broker splits their sales commission with the Buyer’s agent (Sheila Cox)–after deducting certain transaction costs, such as “Errors and Omissions Insurance.”

Please note that practically all real estate agents are independent contractors…not employees of the broker. In fact, real estate agents are usually required to pay certain fees to their broker for the privilege to work at that brokerage. Plus all expenses, including gas and mileage for taking you on home tours, refreshments on tours, paper and ink for contracts, phone fees, computer fees, etc. are paid by the individual agent and are not reimbursed.

 

About MLS Membership

What many people do not understand is that most real estate agents are members of the Multiple Listing Service (MLS). This is a membership where real estate brokers agree to share their sales commission with member agents who help them obtain a buyer for their listing. When a listing agent puts a house for sale on the MLS, the agent agrees to pay other agents a set commission…which may vary depending on whether the agent is a “Buyer’s Agent” or “Subagent.”

mls-subagent

The MLS is the tool real estate agents use to find houses to show to buyers. It is the source database for most homes listed for sale. This is the source that other websites use (such as Zillow and Trulia) to show homes for sale as well. (Which means that an agent’s MLS search gets the data first!)

By the way…real estate agents are NOT (usually) paid employees…they are “straight commission.” They do not receive an hourly or salary paycheck from their Brokerage for showing houses to people for fun. Almost all real estate agents are  Independent Contractors who only earn a living by receiving sales commissions for selling homes. Plus, they pay all their own expenses. So professional agents are careful with their time and only show houses to clients who are ready, willing, and able to purchase a home. Isn’t that what you would do?

So how do I earn the sales commission? I have a very detailed “To Do List for Buyer Clients” that has over 100 tasks that I may perform for you…and only one task is “Show properties until one is found.” So even if I show you 30 houses, that only represents one of the 100+ line items on my To Do list! Trust me when I say that there is a lot more to my job than “just showing houses.” I’m looking out for you every step of the way and keeping my eye on the Listing Agent, the Seller, the builder (if applicable), the lender, the inspector, the title company…I’m always watching out for you because I’m your agent.

to-do-list-buyers

Now you need to understand one more important thing:

»  How To Get Dedicated Buyer Representation in Texas?

 

Texas Home Buying Process

Preliminary Phase: Can You Afford a Home?

If you are buying a home in Texas, then you need to learn about the home buying process, which may be different than other states. One thing to consider is that before you even begin the process of searching for a home, you must:

  • Determine how much house you can afford. A lender is the best place to get that information…it is part of the pre-qualification process.

  • Determine if you will actually qualify for a loan. Some good people don’t, under today’s stricter lending guidelines. You will need a pre-approval letter from a lender to submit with an offer on a home in Sugar Land….Seller’s almost always require one these days!

  • Determine how much it will cost to buy a home. Do you have enough money on hand for the earnest money, option fee, down payment, closing costs, inspections, fees, etc?

I like to break the home buying process down into seven phases.

Search Phase: Find the Home You Want

This is where my Automated Updates comes in handy. Never miss out on another great home! My customized home search will check all MLS listings (including distressed properties) daily and inform you when a house that meets your criteria hits the market. This is the most accurate and up-to-date house search available! And it’s great for out-of-town buyers who need to search for homes online.

  

Touring the Neighborhood With a Local Expert

When you are ready to take a look at houses, then let me know and I will set up the appointments with the sellers, create a map, print out the brochures, and drive you around to see those homes. As we go from house to house, I will point out special points of interest in Sugar Land to get you familiar with the area. It’s very helpful to have a local expert show you around the area…especially if you are new to Sugar Land or Fort Bend County.

But what if you or your spouse are located out of reach of a local tour? I am also able to video tape a walk-through of homes when need be.

Sometimes buyers have difficulty choosing between two or three houses. I have a fantastic Buyer Decision Analysis spreadsheet that helps you to score houses and compare them to make it easier for you to make a wise decision. (See sample below)

 buyerdecisionanalysis

 

Offer Phase: Analyze the Property and Make An Offer

When you find the house that you want to buy, then you move into the Offer Phase. But before you make an offer, you need to know what you’re buying before you buy. That’s part of my Unknown Hazards Protection. I will research your home of choice and create an 18+ page house report so you will know everything there is to know about a house before you make an offer. This report includes tax data, school details with demographics, possible environmental hazards, possible sex offenders on that street, flood data, and more! Where else can you get this level of service?!


»  View Sample Report

Fair warning! There is a lot of paperwork involved in buying a home in Texas. Why hassle with fax machines and scanners? My brokerage, Keller Williams, has the most innovative online paperwork solution available. So you can eSign your paperwork easily online…and so can your seller! This is especially useful for all those buyers who live out of the area and are relocating here. Or, if you have a spouse that hasn’t moved here yet, this is the perfect way to make it easy for him or her to sign the necessary documents.

Option Phase: Thoroughly Inspect the Property and Negotiate Repairs

In Texas, you can buy an “option period” (usually 10 days) from the seller for $200-$300 that gives you the irrevocable privilege to back out of the sales contract for any reason, and still receive your 1 percent earnest money back. This gives you time to have the home thoroughly inspected and find any defects that you cannot live with. It also allows time to negotiate repairs with the Seller. At the end of the Option Period (and the timing is very strict) you can do one of the following:

  • If you “exercise” your option, you lose your option fee, but you get your earnest money back.
    –Or–

  • If you do not exercise your option, then the option fee is usually applied toward your closing costs.

Please know that a home inspection is one of the most important parts of buying a home. But it can be overwhelming trying to find a reputable inspector who you can trust. I provide all my buyer clients with a list of licensed home inspectors in the area to make this process easier for you. Plus, I will negotiate necessary repairs for you with the selling agent…before you close on the home.

In addition, we have many great homes in the Sugar Land area, but some of them may need your personal touch. It’s difficult to estimate these costs ahead of time or to know who to hire. I can help by estimating costs and by recommending local contractors who provide good quality service at reasonable prices. Plus, since I have remodeled many homes myself, I can help answer questions that you may have and get you going in the right direction.

Pending Phase: Satisfy the Lender and Title Company Requirements

If you go past the Option Period and continue the buying process, then you move into the Pending Phase where the focus is on the lender and the title company. This is when you will need to diligently pursue getting your loan, providing all the documentation that the lender requires in a timely manner. This is not for the “weak at heart”! Not only is the loan process much more difficult than it was before 2008, there are also strict time guidelines in the purchase contract regarding the loan application process, and if you do not follow them, you can lose your 1 percent earnest money (and the house).

NOTE: In Texas, title companies are neutral, third-party companies who handle the closing and lending documents to purchase a home. We do not close in attorney offices.

During this phase you will also:

  • Select your home owner’s “hazard” insurance (get three quotes to get the best price).

  • Select your residential service contract company.

This is where my Repair Protection kicks in. Since I believe that all buyers need a residential service contract (a.k.a. home warranty) on a newly purchased home to help off-set future repair costs, I will either negotiate the Seller to pay for one, or else I will pay for it myself up to $500.

Closing Phase: Sign On The Dotted Line

As previously stated, in Texas, title companies are neutral, third-party companies who handle the closing and lending documents to purchase a home. We do not close in attorney offices.

About a week in advance, I will schedule the closing with you and the title company. We will meet at the title company on the day of closing, sit in a conference room with an escrow officer (who is also a notary), and you will sign the legal documents to purchase the home.

You will need to bring two forms of ID with you to the closing.

Follow-up Phase: Enjoying and Maintaining the Home

After you “Close and Fund” you will receive the keys to your new home! If you would like, I will wait a few weeks to let you move in, and then I will photograph your home after you are settled and create a “Just Moved” video that you can email to all your loved ones. This is a wonderful way for you to show your new home to friends and family who don’t live close-by.

And, after the sale, I stay in touch by sending you a Monthly Home Maintenance list and other items of value that will help you as a home owner. I usually become friends with my clients, and I enjoy keeping in touch with them.

»  Terms to Know: http://www.hud.gov/offices/hsg/sfh/buying/glossary.cfm#top

 

Sugar Land Home Security

Sugar Land Home Security: Tips for Securing Your Home That Are Not Well Known

Sugar Land TX is a fairly safe city and has even been named one of the safest cities in Texas from time to time (see Sugar Land Crime). But a while back I had the unfortunate experience of having my home burglarized.

I thought my home was pretty safe:

  • It’s in a low-crime neighborhood with active police patrols.
  • I have an alarm which I always activate when I leave.
  • I had good quality, double-key locks on all my doors.
  • I have two, small, barky dogs.

But in spite of all that, my front, side door (next to the garage, but on the front of the house) was kicked in at 2:25 p.m. on a school day…in the middle of the afternoon! I always thought break-ins happened at night! But here’s what I found out when I researched home security Sugar Land.

Your Door Is Easy to Kick In

When I researched how to prevent break-ins, I came across some interesting facts that I did not know. One of the best articles on home security  that I read was “Home Security: Burglary Prevention Advice” by Chris E McGoey, CPP, CSP, CAM at  http://www.crimedoctor.com/home.htm

That article points out:

“The most common way used to force entry through a door with a wooden jamb is to simply kick it open. The weakest point is almost always the lock strike plate that holds the latch or lock bolt in place followed by a glass paneled door. The average door strike plate is secured only by the soft-wood doorjamb molding. These lightweight moldings are often tacked on to the door frame and can be torn away with a firm kick. Because of this construction flaw, it makes sense to upgrade to a four-screw, heavy-duty, high security strike plate. They are available in most quality hardware stores and home improvement centers and are definitely worth the extra expense. Install this heavy-duty strike plate using 3-inch wood screws to cut deep into the door frame stud. Use these longer screws in the knob lock strike plate as well and use at least one long screw in each door hinge. This one step alone will deter or prevent most through-the-door forced entries. You and your family will sleep safer in the future.”

So now I tell all my friends, family, clients–EVERYONE!–that they need to secure their strike plates with 3.5 inch screws. It doesn’t matter how good your lock is, if all a thief has to do is kick in the door and bust the doorjamb! These screws are inexpensive and easy to install no matter how “tool challenged” you may be.

You Need Better Locks

The second thing that I did to improve home security Sugar Land, was to replace my double-key locks with The Ultimate Lock which was designed by a former Houston police officer and are made right here in Fort Bend County! These things are incredible. They have a safety pin which, when pushed in, prevents even a person with a key from unlocking the door. You can buy them at Lowes for about $180 each.

NOTE: The only thing that I don’t like about these locks is that they are not double-key locks…so if your door has glass around it, you will need security film to prevent a thief from breaking the glass to unlock the door (see below).

Watch the demonstration video 

 

Security Film for Windows Is Incredible

Another thing that I learned about home security Sugar Land is that if they can’t kick your door in, then they will probably “smash and grab” a window…most likely a master bath or master bedroom window, because most people keep their valuables and prescription medication in the master bathroom or closet. I am good friends with two police officers who have security film on their windows to prevent this. Plus, I asked a Fort Bend Sheriff’s deputy to give my house a security audit, and he too has security film on his home windows. That’s 3 out of 3 police officers that I know who have security film on their own homes. So I contacted Steve Meyer, at SunTech Glass Tinting, to install security film on my windows too…especially all the windows next to my doors and locks!

There are many different brands of security film, but you have to check out a video demonstration to believe it.

You can search on YouTube for “security film for windows” and see lots of different demonstration videos. The cool thing about this stuff, is not only does it improve the security of your home, it’s also a layer of protect from flying debris…say, during a hurricane. I think…that’s good…one less thing.

 

Sugar Land TX

Sugar Land Relocation

Why I Love Sugar Land

There are so many benefits to living in the Houston area, and Sugar Land is one of its top suburbs. Why do I think Sugar Land TX is great?…

Culturally Diverse

Sugar Land is a unique suburb in that it has a distinct “cosmopolitan” feel and is very culturally diverse. While about 44 percent of the population is white, the remaining 56 percent is comprised of Asian, Indian, Middle Eastern, Hispanic and African American cultures. And just as important as its diverse demographics, is its fostering of an inclusive and accepting community. In fact, in 2007, Sugar Land was the first city in the nation to be named a Community of Respect® by the Anti-Defamation League (ADL). It has maintained this distinction.

» Read Sugar Land embraces diversity

 

Excellent Schools

Sugar Land schools are known to be excellent. Over half of the 33 elementary schools have a score of 9-10 with Greatschools.org and, likewise, six of the fourteen middle schools score a 9-10 as well. There are eleven high schools serving the area and two score 9s (Clements and Austin) and two score 8s (Dulles and George Ranch). Sugar Land is part of Fort Bend ISD which is an award-winning school district but does not rate as highly as the nearby Katy and Lamar Consolidated ISDs. This is because Fort Bend ISD is much larger than those ISDs and includes many non-Sugar Land schools (like nearby Houston). Almost all Sugar Land schools score 8-10 (the highest scores available) at Greatschools.org.

 

High Quality of Life

With all of these accolades it’s no wonder that Sugar Land has been on the list of numerous best places to live surveys. Some of the most noteworthy include CNN Money Magazines 100 Best Place to Live (2006) in the nation, Forbes’ list of Top Towns to Live Well and Business Week’s best and most affordable suburbs. America’s Promise–The Alliance for Youth name Sugar Land a three-time winner of the nation’s 100 Best Communities for Young People.

 

Quality Homes and Communities

Sugar Land is home to the largest number of master-planned communities in the nation. Every community has quality homes and wonderful subdivisions with swaths of green space and community amenities such as club houses, swimming pools, parks, tennis courts, fishing lakes, and walking trails. For neighborhood details, jump to Sugar Land Neighborhoods.

 

Well-Maintained and Scenic Public Spaces

Because it is entirely master planned, Sugar Land has ample well-designed public spaces, parks, walking- trail systems and tree-lined streets, all of which are held to high scenic standards. Consistently winning awards from Keep Texas Beautiful and the Texas Recreation and Parks Society, Sugar Land also received the inaugural Texas Scenic City “Silver” Certification for achieving the highest level of scenic standards for public roadways and spaces.

 

Low Crime Rate

According to the City of Sugar Land’s website, Sugar Land’s crime rate for 2017 was the lowest on record.

  • Sugar Land’s crime rate decreased 10 percent from 2016 to 2017. The rate is 50.4 percent lower than the state average and 44 percent lower than the national average for 2016.
  • Sugar Land’s violent crime rate decreased 22 percent from 2016 to 2017. The rate is 84 percent lower than the state average and 82 percent lower than the national average for 2016.
  • Sugar Land’s property crime rate decreased 9.5 percent from 2016 to 2017. The rate is 45 percent lower than the state average and 38 percent lower than the national average for 2016.

Read More

 

Awards

Sugar Land, TX, has won the following awards:

2018

  • Top 50 of the Safest Cities to Retire in America for 2018 – SecurityChoice.com
  • Among the Top 15 Most Entrepreneurial Cities for 2018 – FitSmallBusiness.com
  • Recognized Among the Best 100 Towns in Texas for Starting a Small Business – LendEDU.com
  • Sugar Land ranked in the top 50 most searched cities (Among most popular places in the US to relocate to) – moveBuddha.com
  • Honorable Mention for Brazos River Park – H-GAC Parks and Natural Areas Awards

2017

  • List of the Safest Cities in the U.S., No. 9 in Texas – SafeHome.com
  • Named one of Best Vacation Places to Escape the Winter – Expedia
  • Sugar Land Top-ranked for expected holiday residential retail spending – WalletHub
  • Sugar Land Top-Ranked in the 2017 Digital Cities Survey for cities using technology to improve citizen services, enhance transparency and encourage citizen engagement.
  • Named one of America’s best small markets for business – Global Trade magazine
  • Ranked as one of the most financially secure neighborhoods in all of Texas – LendEDU.com
  • Sugar Land Top-Ranked, Best Places to Raise a Family in Houston – Niche.com
  • 5 Great Places to Live Around Houston – Neighborhoods.com
  • Sugar Land Top-Ranked, 50 Cities With Cheap Rent and Good Jobs for New College Grads – Money Magazine
  • Recognized as Prime Area in the U.S. to Build a Lifelong Dream Home
  • Recognized among “2017 Best Cities for Seniors to Retire”
  • Top New or Renovated Venue, Billboard Magazine (Smart Financial Centre)

>> See more awards at http://www.sugarlandtx.gov/1002/Awards-Recognitions

 

sugar land video tour

 

Extended Stay in Sugar Land

Also known as Temporary Housing or Short-Term Housing

If you need extended stay in Sugar Land or Stafford (which is adjacent to Sugar Land), here are some options. These options frequently change, but this should at least get you started.

Extended Stay America Houston – Sugar Land
13420 Southwest Fwy, #59, Sugar Land, TX 77478
(281) 494-6699

Extended Stay America Houston – Stafford
4726 Sugar Grove Blvd, Stafford, TX
(281) 240-0025

Studio 6 Houston – Stafford/Sugar Land
12827 Southwest Freeway, Stafford, TX, 77477 
(281) 240-6900

Aplus Furnished Homes
2018 Winged Foot Dr Missouri City, TX 77459
Brittany
(281) 416-2700

Executive Living
Carol Gremillion
(281) 494-4945

Sugar Land Video Tour

Sugar Land Videos

If you are relocating to the city of Sugar Land TX, you may want to get a feel for what it’s like to live here. So I have some real videos of Sugar Land, TX, driving around our beautiful city and lovely neighborhoods.

»  Read about Sugar Land neighborhoods

Main Video of Sugar Land, TX

The following is an in-depth video of Sugar Land, TX, which shows schools, parks, hospitals, shopping, libraries, police stations, recreation centers, entertainment, and more!

 

Avalon Sugar Land Video

Check out this video drive-through tour of Avalon showing the community clubhouse, pool, tennis courts and more. Click here more information on Avalon, Sugar Land.

 

Commonwealth Sugar Land Video

Check out this video drive-through tour of Commonwealth showing the community clubhouse, pool, and more. Click here more information on Commonwealth, Sugar Land.

 

Greatwood Sugar Land Video

Check out this video drive-through tour of Greatwood showing the community clubhouse, pools, tennis courts and more. Click here more information on Greatwood, Sugar Land.

 

New Territory Sugar Land Video

Check out this video drive-through tour of New Territory showing the community clubhouses, pools, tennis courts, Pecan Park, and more. Click here more information on New Territory, Sugar Land.

 

 

Riverstone Sugar Land Video

Check out this video drive-through tour of Riverstone showing the community clubhouses, pools, tennis courts and more. Click here more information on Riverstone, Sugar Land.

 

Sweetwater Sugar Land Video

Check out this drive-through video tour of Sweetwater showing the community country club, pool, tennis courts and more. Click here more information on Sweetwater, Sugar Land.

 

Telfair Sugar Land Video

Check out this video drive-through tour of Telfair showing the community clubhouse, pool, tennis courts and more. Click here more information on Telfair, Sugar Land.